Wednesday, March 26, 2008

McCain on the Mortgage Bailout

Though I could never vote for a candidate who attacks freedom of speech the way McCain does, I'm glad he took this position:

“it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers.”[...]“Some Americans bought homes they couldn’t afford, betting that rising prices would make it easier to refinance later at more affordable rates,” he said. Later he added that “any assistance must be temporary and must not reward people who were irresponsible at the expense of those who weren’t.”

As compared to Clinton who counters:

But his remarks drew a quick, pointed rebuke from Mrs. Clinton, who criticized Mr. McCain’s hands-off, market-oriented approach, saying it would lead to “a downward spiral that would cause tremendous economic pain and loss” for Americans.

“It sounds remarkably like Herbert Hoover, and I don’t think that’s good economic policy,” Mrs. Clinton told reporters in Greensburg, Pa. “The government has a number of tools at its disposal. I think that inaction has contributed to the problems we face today, and I believe further inaction would exacerbate those problems.”

3 Comments:

I see nothing in McCain's reported statements that is encouraging. He does not in principle oppose statism.

Instead there is evidence in the article of the standard, rhetorical divide between conservative mixed-economy statists and moderate-leftist mixed-economy statists: The leftists say they want governmental action with no stops, while the conservatives try to distinguish themselves by acting "prudently" in government handouts--in the meantime still claiming to defend a free market.

This is an implicit appeal to family values, the special domain of conservativism (the highest values of which are God, Tradition, Nation, and Family).

At this point I still plan to (1) vote wholesale (by party), and (2) vote for the party that is the least long-term threat, given the nature of the people they most represent as an up-and-coming, philosophically-motivated and therefore generation-spanning movement.

That seems to lead to the zoo known as the Democratic Party, but I want to watch further and think more about a proper method of selection.

The New York Times (March 28, 2008) carries an article about the subject of this thread:

"Parties Differ on Whom Economic Aid Should Help

Edmund Andrews

[...] But while their philosophies might seem starkly different, in reality both parties have come to the conclusion that major government involvement is needed to rescue the financial and housing markets.

The ideological clashes are less about whether the government should intervene in the economy, and more about whom it should try to rescue. [...]"

The article contains fascinating information about the minor stylistic differences between leading Republicans and leading Democrats.

As always thanks for the comments, although I must admit that in this case I’m not sure what you’re arguing against. Nowhere did I say or imply that I thought McCain was a principled opponent of the welfare state, or that he was a defender of free markets or even that he had a consistent view on this issue in particular. Indeed, in my opinion, today’s politics -- and its source, the culture and electorate at large –- precludes any such stance by a mainstream politician, much less by a leader of a major party.

Instead, my comment pertained only to a specific point on the issue of the “housing or mortgage crisis”, an issue which I’ve been following relatively closely, and in which I have yet to see anyone in the mainstream media (e.g. in the WSJ or NYT’s) dare to make the observation that rewarding the irresponsible can only be done at the expense of the responsible. I think this is a key point in the debate and I was, and still am, glad that someone with visibility of McCain made it, so that it could become part of the debate. Now of course I would have preferred to quote some other influential person making this same point, if I could only have found such a person.

(This weekend’s Mauldin letter has such a statement, but as far as I know, he never put forth something similar prior to McCain putting the idea on the table. Says Mauldin: “One final thought: If we do end up with a government bailout, and I agree that it's likely, I sincerely hope that no one who cannot document that the information they submitted for their no-documentation loan was accurate will be given any assistance. If you lied, you do not deserve taxpayer money. If you took out a loan on which you could not demonstrate that you could make the payments, just because you wanted to profit from a resale of a home which was "surely" going to rise, you should not get tax-payer money. For every person we help like that, we keep a house from going down to a price that someone who deserves a home and has played by the rules could buy. Just my take.” (emphasis added).

Links to this post:

Ideas cannot be fought except bymeans of better ideas. The battleconsists not of opposing, but ofexposing; not of denouncing but of disproving; not of evading,but of boldly proclaiming a full,consistent and radical alternative.
-- Ayn Rand